As part of our regular Finadium Investors in Securities Lending (FISL) events, Finadium and leading agent lenders will present a webinar on counterparty default indemnification in securities lending on Wednesday, November 20th at 10AM ET / 3PM UK / 4PM CET. The webinar is free for any buy-side firm, Finadium subscribers and confirmed FISL 2025 sponsors. Visit the event page and register here.
Indemnification that protects against the risk of a counterparty default remains an important offering in agency securities lending. Bank, insurance and guarantee-based indemnification are all options, and some beneficial owners have decided to lend without indemnification altogether. Investors at pensions, Sovereign Wealth Funds and fund managers have opportunities to create their own strategies to optimize their preferred risk and reward profile.
Indemnification remains a priority for large asset managers: in a 2024 Finadium survey, 74% of large fund complexes said that it was very important and another 15% said it was somewhat important, for a total of 89% in favor. The sentiment continues that fund boards would not accept a lending program without indemnification, even when managers recognize that collateral of over 100% is the first and main line of defense against counterparty default risk. So what, say managers: indemnification is still critical.
But should indemnification come from a bank or an insurance company? Could beneficial owners lend to some big borrowers without indemnification and smaller borrowers with indemnification? And what about the idea of central counterparties (CCPs) that offer their own variations on indemnification through their risk waterfalls?
Agent lender executives from eSecLending, J.P. Morgan, Northern Trust and State Street will join the panel to sort through the challenges and opportunities for both agents and their clients in charting the path forward on indemnification.
Join this webinar to learn about the latest opportunities and challenges to indemnification including how it functions today and as the market continues to evolve, does indemnification correctly align the interests of beneficial owner clients and agent lenders?
Other discussion topics include:
- How important is counterparty default indemnification for clients in running or maintaining their program?
- What are the options for clients between bank indemnification and insurance-based indemnification?
- Can clients lend with and without indemnification to some or all counterparties? Does it matter if a client is lending to a G-SIFI? How does this change the risk profile of the transaction?
- Is indemnification part of the solution for clients to mitigate RWA for borrowers? How about guarantees or other risk transfers?
- What impacts could Basel III Endgames have on agent lender indemnification?
This webinar is open to all asset owners and asset managers globally, Finadium subscribers and confirmed FISL 2025 sponsors.
To register, please visit https://finadium.com/event/the-state-of-indemnification-in-securities-lending-a-webinar-for-the-global-buy-side/